Governor of the Bank of Israel Prof. Stanley Fischer's lobbying is paying off. Sources inform ''Globes'' that Prime Minister Benjamin Netanyahu has instructed Prime Minister's Office director general Eyal Gabbai to prepare a final draft for the new Bank of Israel law within a month. The sources added that the draft is already written, except for one clause covering the Ministry of Finance Director of Wages' oversight of Bank of Israel salaries.
Under a pending deal between Fischer, Netanyahu, and Gabbai, the Ministry of Finance will lose its oversight of Bank of Israel salaries.
The sources said that Director of Wages Ilan Levin has not been notified of this deal, even though the final draft is already written.
To make the setting of Bank of Israel salaries more flexible, it will be necessary to amend the draft of the new Bank of Israel law. The proposed new law deviates from the principles of Article 29 A of the Foundations of the Budget Law (5745-1985), which stipulates that any change in salaries at a budgeted office (of which the Bank of Israel is one) must obtain the explicit approval of the minister of finance or someone on his behalf (i.e. the director of wages). The Ministry of Finance has vehemently objected to a special exemption for the Bank of Israel from this requirement.
The sources said that Levin agrees with the Ministry of Finance's position on this point, and opposes any exemption on salary oversight. The main reasons are the repeated salary scandals at the Bank of Israel over the past 20 years, and concern that doctors, university faculty, and others will make similar demands.
Yesterday, half of Bank of Israel employees received a special "outstanding grant" amounting to 90% of their base salaries, in accordance with the salary agreement signed between the Bank of Israel and the Ministry of Finance in late 2007.
Published by Globes [online], Israel business news - www.globes-online.com - on June 2, 2009
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